European stocks traded lower on Thursday, in their first reaction to news the Federal Reserve was looking to lift interest rates quicker than expected in the...
European stocks traded lower on Thursday, in their first reaction to news the Federal Reserve was looking to lift interest rates quicker than expected in the world’s largest economy.
Markets took a hawkish read of the news that the Fed’s summary of economic projections showed two interest rate increases in 2023 and that it has begun discussing when to slow down the rate of bond purchases. “It might not seem like much, but this move caught the bond traders flat-footed. This was astounding given they had already expected a hawkish surprise. The Fed managed to out-hawk even the hawkish expectations,” said Kevin Muir, the veteran trader and author of The MacroTourist blog.
Most sectors in Europe pulled back, though banks including HSBC Holdings HSBA, +2.04% and BNP Paribas BNP, +2.82% rose, on the prospect for higher bond yields and better margins.
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